IG Report: Many said 'Yes' to ill-fated Digital Domain tax grant

Senate President Don Gaetz has grown fond of saying, about the
legislative process, “It takes three ‘Yeses’ to get to ‘Yes’ and only one ‘No’
to get to ‘No’.”

When it comes to the ill-fated $20 million grant to a now-bankrupt
Port St. Lucie film studio, several legislative power players said ‘Yes’ to a
deal that later cost taxpayers dearly.

The long list of abettors, unveiled in a recently released Chief
Inspector General report, includes former Gov. Charlie Crist, former economic
development head Dale Brill, current Chief Financial Officer Jeff Atwater, former
House Speaker Larry Cretul, former U.S. Representative David Rivera, former
Rep. Kevin Ambler and former Lieutenant Gov. Jennifer Carroll.

In a process that Brill said involved taking great energy to
“deliberately and intentionally sidestep the process,” Digital Domain was able
to corral enough support from Tallahassee
power players to get $20 million in taxpayer grants over the objections of the organization
responsible for vetting such awards.

According to the report, Enterprise Florida
advised against giving Digital Domain such a large grant in 2009, raising
questions about its financial stability.

But there were several other power players who said ‘Yes,’
allowing the company to circumvent the vetting process and gain access to a
large pot of taxpayer cash.

Last year, Digital Domain went bust in a high-profile
bankruptcy.

Gov. Rick Scott ordered his Chief Inspector General Melinda
Miguel to investigate how the deal came together.

According to Miguel’s report, here’s a timeline of how the
ill-fated deal came into existence:

June 2008: Digital Domain CEO John Textor called Dale Brill,
head of the Office of Tourism, Trade and Economic Development, expressing
interest in setting up a digital film studio in Florida. Textor said he would need $100
million in economic incentives from the state to make it happen.

January 22, 2009:
Textor submits his business plan to Enterprise
Florida, which is responsible for
vetting economic incentives deals, and deciding which companies are worthy of receiving taxpayer grants.

April 16, 2009: After Enterprise Florida CEO John Adams
called the financials of Digital Domain “extremely weak,” the organization said it could only recommend a cash grant of $6.1 million.

April 2009: Rep. Kevin Ambler called Brill to his office, to
discuss how to get Digital Domain the full $20 million, without the support of Enterprise Florida.
Brill obliged.

May 2009: The Legislature put a $20 million appropriation in
the budget for the Digital Domain project, circumventing the vetting process.

May 22, 2009: Gov. Crist sent a letter to Senate President
Jeff Atwater and House Speaker Larry Cretul, seeking approval of the Digital
Domain project (which was included in the budget Crist would later sign). There’s
no evidence that Cretul or Atwater
objected to the funding. Last year, Atwater said he did not know about the deal until it was too late.

June 2009: The Legislative Budget Commission, chaired by
Rep. David Rivera, approved the funding of the project.

June 1, 2009: Brill sent a
memo to Crist, recommending the $20 million funding for the project.

June 24, 2009: Crist approved the award.

Summer 2009: An unnamed legislator on the Economic
Development Policy Committee began to criticize the Digital Domain deal, sparking an investigation by then-Rep. Jennifer Carroll.

Nov. 12, 2009: Carroll sent a letter to Crist,
saying she had looked into the Digital Domain deal, and
found that there was no impropriety.

Ambler, who had pushed for the
deal, was later hired by Digital Domain. He claimed “legislative privilege” and
declined to discuss details with the inspector general.

The company went bankrupt last
fall, and the state is trying to recoup its losses in court.

The IG report found that no laws were broken in the deal,
and that a similar award “could happen again today if the Legislature
appropriates funds and gives the Executive Branch the discretion to expend
those funds.”

Throughout the report, the Inspector General makes it clear
that several lawmakers and agency officials were complicit in the decision to
award Digital Domain $20 million, with few raising a flag to the questionable
deal.

It's a lesson in how power often works in the state Capitol.

Crist could not be reached by investigators, but his chief of staff Eric Eikenberg told them that Textor had been "very aggressive" and had "a presence in Tallahassee."

Brill said he had concerns about the deal but never "threw himself on the sword" because he likely would have lost his job.

Former Senator Ken Pruitt, then vice chair of the Legislative Budget Commission, told the IG's office that he did not think there were any controls that could be put in place to stop this.

Lawmakers are cracking down on economic incentives deals this year, hoping to bring more transparency to the process. Some are criticizing the process altogether, saying that Florida should not continue to send money to corporations who might later go belly-up.

"There needs to be more oversight and accountability of the public's money," said Dan Krassner, executive director of the independent government watchdog group Integrity Florida.

Scott used the IG report as an opportunity to take a jab at Charlie Crist's administration.

“This Inspector General report shows two things – first, our current economic project vetting process is in place for a reason, and second, that process was clearly circumvented by the previous administration for the Digital Domain deal," he said in a statement.

Meanwhile, Textor came out to defend himself, saying that Enterprise Florida had vetted the program and agreed to provide funding for Digital Domain.

"The disclosures in the IG report finally allow the public and policy makers to see that the project was fully vetted, and most importantly, approved by Enterprise Florida," he said in a statement.